ACA Penalty Letters Issued Soon

The IRS recently indicated in FAQs that in “late 2017” they will begin sending ACA employer mandate penalty notices to employers they believe owe a penalty for calendar year 2015. If the IRS believes you owe a penalty, they will send Letter 226J to the individual that you reported as your employer representative on your 2015 Form 1094-C (employer transmittal form). The letter will include:

  • Brief explanation,
  • Summary table itemizing the proposed payment by month,
  • Employer shared responsibility response form, Form 14764, “ESRP Response”,
  • Form 14765, “Employee Premium Tax Credit (PTC) List” which lists, by month, the ALE’s assessable full-time employees,
  • Employer next steps if it agrees or disagrees with the proposed penalty, and
  • Description of the actions the IRS will take if the ALE does not respond timely.

Now is the Time to Prepare:

  • Inform your staff to be on the lookout for Letter 226J. If it is received action should be taken immediately.
  • Define the internal individual that is responsible for taking action.

What You Need to Know if You Get a Letter:

  • Take action immediately. Generally, the IRS provides 30 days to respond or the IRS will assess the penalty as proposed.
  • Follow the directions provided. The IRS will provide you the opportunity to agree or disagree with the proposed penalty.
  • Contact your dedicated Austin & Co. representative. We are available to provide general guidance or collect carrier data that may or may not be needed for your response to the IRS.
  • Click here for more tips from the IRS.